A 47-year-old Palm Beach Gardens lawyer has been accused of pocketing more than $1.6 million in government-backed loans that were designed to help small businesses survive the COVID-19 pandemic.
Derek Acree, who was charged last week with conspiracy to commit wire fraud, is the latest South Florida resident to be caught up in the federal government’s crackdown on pandemic cheats.
In recent weeks, the South Florida U.S. Attorney’s Office has charged 23 people with defrauding COVID-19 loan programs out of a total of more than $150 million.
Overall, it has filed 80 cases and recovered nearly $23.5 million in stolen funds since the $2.2 trillion CARES Act economic-stimulus bill was passed in March 2020, it said. The office was recently tapped to lead one of the nation’s three COVID-19 Fraud Strike Force Teams.
New charges follow unregistered securities sale settlement last year
At a hearing in U.S. District Court last week, Acree indicated he intends to admit he was involved in the scheme. He was released from custody after posting a $500,000 bond. He is to return to court for a plea hearing on Oct. 11.
Last year, Acree agreed to return $12.8 million and pay a $125,000 penalty after the U.S. Securities and Exchange Commission accused him, a business partner and their Cayman Islands-based company of selling unregistered securities.
Like others charged with swindling federal relief programs, federal prosecutors said Acree submitted phony applications to get loans that didn't have to be repaid if they were used to keep businesses afloat.
Based on bogus information, Acree and an unidentified partner received three loans through the Paycheck Protection Program and another from the Economic Injury Disaster Loan Program, according to court records.
“Each application included false statements about the number of employees and the average monthly payroll or gross revenue,” prosecutors wrote.
All four of the loans were submitted on behalf of Delaware-based companies Acree controls, they said. Acree and his co-conspirator used the lion’s share of the money for personal expenses.
Attorney David Roth, who represents Acree, didn’t return an email for comment.
Regulators say lawyer misled investors in unregistered securities case
On his personal web page, Acree said that after graduating from law school at the University of Florida, he worked as an executive for Morgan Stanley and MasterCard. He left the corporate world to start his own businesses, including a private equity firm.
Most recently, he said he was managing partner at Blockchain Credit Partners. He described it as “an organization that pioneers the re-imagination of the fund industry using blockchain technology.”
When the SEC charged the company, Acree and one-time West Palm Beach area resident Gregory Keough with selling $30 million in unregistered securities, regulators said they misled investors.
Without admitting wrongdoing, Acree and Keough agreed to return investors' money and pay the penalty.
Jane Musgrave covers federal and civil courts and occasionally ventures into criminal trials in state court. Contact her at email@example.com.
This article originally appeared on Palm Beach Post: South Florida attorney faces federal charges of COVID relief fraud